Ci v i l LEGAL AID A ND LEG A L EX PEN SES INSURANCE: AN A N A LY SIS Thesis submitted for the degree o f Doctor o f Philosophy At the University o f Leicester By Murray Simon Charles Fairclough LL.M Barrister-at-Law Departm ent o f Law University o f Leicester S um m er 1998 UMI Number: U117376 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted Also, if material had to be removed, a note will indicate the deletion Dissertation Publishing UMI U117376 Published by ProQuest LLC 2013 Copyright in the Dissertation held by the Author Microform Edition © ProQuest LLC All rights reserved This work is protected against unauthorized copying under Title 17, United States Code ProQuest LLC 789 East Eisenhower Parkway P.O Box 1346 Ann Arbor, Ml 48106-1346 ACKNOW LEDGEM ENT My thanks to Professor Robin W hite for his patience and guidance in the com pilation o f this thesis ABSTRACT Modem civil legal aid, has its roots in the post w ar United Kingdom, being a fundamental component o f the w elfare state, recognised as such by the political parties o f the time The provision o f civil legal aid today is a different anim al and does not share the sam e values as the 'old' schem e This analysis will assess the evolution o f civil legal aid, its success and failure, and consider the changes it has undergone and the forces behind those changes in dictating its current profile as a limited and franchised public services provision Legal expenses insurance, unlike civil legal aid, is a relative new com er as a provider o f access to civil justice The scepticism that accom panied its arrival in this country, som e 20 years ago, has dissipated Insurers battled with the problem s o f adverse selection, European regulation and the public perception o f their product, all o f w hich have influenced m arket penetration The position o f legal expenses insurance within the civil ju stice system has begun to strengthen and is now openly recognised and supported by the legal establishm ent A key objective o f this analysis is to consider the rise o f the legal expenses insurance m arket in the United Kingdom This analysis seeks to assess the history o f legal expenses insurance and evaluate its current position as a viable addition, or possible alternative, to State funded civil legal aid Therefore, it becom es necessary for this study to consider the position o f com parative European jurisdictions In addition, the role and reaction o f the legal practitioner situated am idst such significant and fundamental change is solicited and evaluated since they have, at once, fought change and yet accepted it in equal m easure Finally, this analysis explores the future position o f civil legal aid and legal expenses insurance It considers the survival o f the former, grow th o f the latter and the dynam ics o f the State and private sectors w orking together to m ould a new m odel for the provision o f access to civil ju stice in the United Kingdom TABLE OF CONTENTS TITLE PAGE ACKNOWLEDGEMENT ABSTRACT TABLE OF C O N T E N T S TABLE OF CASES TABLE OF STA T UTES TABLE OF TR EA T IES AND E U R O PE A N LEG ISL A T IO N TABLE OF STA TUTO RY IN S T R U M E N T S INTRODUCTION PART ONE CIVIL LEG A L AID CHAPTER AN H ISTO R ICA L SK ETC H 1.1 The R equirem ent o f Legal Aid for the P oor 1.2 The Political P arties and Legal Aid 1.3 Legal Aid in L itigation 1.4 Legal Aid O ther than for L itigation 1.5 T h e R eport o f T he R ushcliffe C om m ittee C H A PTER THE RULES OF A C C E SS 2.1 The Need for Structure and C ontrol 2.2 A dm inistration - An O utline 2.3 A ssessm ent C ontrol - T he M erits T est 2.4 A ppeal 2.5 The M eans T est - T he Principle 2.6 C urrent E ligibility 2.7 T he D ecline o f C ivil Legal Aid 2.8 T he M eans Test - A New In terp retation 2.9 Financial Im plications CHAPTER PROTECTING THE FUND 3.1 M ethods o f Protection 3.2 C ontribu tions - T he C oncept 3.3 A ssessm ent o f M eans 3.4 The C ontribu tion Paym ent 3.5 The V alue o f C ontribu tion R ecovery 3.6 G reen Form E ligibility and C on trib u tion s 3.7 C riticism 3.8 C onclusions 3.9 C osts 3.9.1 C osts O rders and L egally A ided P ersons 3.9.2 O rder For C osts in F avour o f the A ssisted P erson C osts O rders A gainst L egally A ided P ersons 3.9.4 O rders for C osts A gainst the Legal A id Fund 3.10 C riticism 3.11 C onclusion 3.12 T he S tatutory C harge 3.13 A pp lication o f T he C harge 3.14 M itigation and A voidance 3.15 C riticism 3.16 C onclusion 3.17 G enerally PA R T T W O CIVIL LE G A L AID IN PR A C TIC E CHAPTER CIVIL LEGAL AID A ND TH E P R A C T IT IO N E R 4.1 The Legal Aid P ractition er - A Profile 4.2 Cost C oncern 4.3 The R ew ard - G eneral Perception 4.4 The Legal Aid Board 4.4.1 Paym ent 4.4.2 4.5 P aym ent on A ccount and Interest R eceived on C osts C onclusion CH A PTER FR A NC H ISIN G - A B E T T E R DEAL? 5.1 F ranchise - By W hat D efinition 5.2 Existing Inefficiency 5.3 T argeting 5.4 The C oncept o f Q uality 5.5 C riticism 5.6 C onclusions PA R T T H R E E LEG A L E X PE N SE S IN SU R A N C E CHAPTER THE E M E R G E N C E O F L E G A L E X PE N SE S IN SU R A N C E 6.1 Definition 6.2 Legal-Expenses Insurance In T h eory 6.3 Inhibitors and False C om p arisons 6.4 Sm all Beginnings 6.5 The D evelopm ent o f Legal E xpenses In surance 6.6 A ssessing the Future o f LEI CH A PTER THE RANGE O F PR O D U C T S AV AILABLE 7.1 The M arket Products 7.2 Stand A lone N on-Specific Perils L egal E xp en ses In su ran ce 7.3 Stand A lone Specific Perils L egal E xp en ses In su ran ce 7.4 A dditional Specific Perils Legal E xp en ses In su ran ce 7.5 U ninsured L oss R ecovery Legal E xp en ses In su ran ce 7.6 H elp-lines 7.7 V alue - The Public Perception 7.8 C onclusions C H A P T E R LEG A L EX PEN SES IN SU R A N C E , PU R C H A SE A ND USE AN A NA LY SIS 8.1 The Need for A nalysis 8.2 A w areness and P urch ase - The S am p le G roup 8.3 T he Findings 8.3.1 G eneral Insurance A w aren ess 8.3.2 LEI A w areness 8.3.3 LEI C overage 8.3.4 LEI Type 8.3.5 Solicitor Usage 8.3.6 Solicitor Usage C overed by a LEI P olicy 8.3.7 Level o f Interest - Stand A lon e LEI 8.3 C onclusions 8.4 C laim s E xperience 8.5 C onclusions C HAPTER THE SO LIC ITO RS EX PE R IE N C E 9.1 T he Im portan ce o f the Solicitors E xp erience 9.2 T he Sam ple - Its L im itations and Intent 9.3 P ractice D etails 9.4 C ivil Legal Aid 9.5 Legal Expenses Insurance 9.6 C ivil Legal Aid - Legal E xpenses In su ran ce C om p a riso n 9.7 C onclusions CHAPTER 10 AN EC D IR EC TIVE STEPS IN 10.1 Introduction - Pre 1987 10.2 T he D irective, U nited K ingdom L egislation its E xten t and A pp lication 10.3 C om p lian ce 10.4 A uthorisation 10.5 C onflicts o f Interest 10.6 C on flicts and the Position o f the S olicitor 10.7 F reedom o f C hoice 10.8 Panel Solicitors 10.9 T he D TI, T he Insurance O m bu dsm an and T h e EC D irective 10.10 Freedom o f C hoice, the R egu lations their In terp reta tio n and the L egal Im p lication s for Insurers 10.11 Insurers - N om ination and R ecom m en d ation o f S olicitors to the Insured 10.12 C onclusions PART FO UR EUROPE, A N EW UK GOV E R N M E N T A ND THE FU TU RE CHAPTER 11 LEGAL AID AND LEG A L EX PE N SE S I N S U R A N C E A EUROPEAN C OM PA R A T IV E STU D Y 11.1 The C om parators 11.2 G erm any 11.3 France 11.4 The N etherlands 11.5 C onclusions C HAPTER 12 A NEW G O V E R N M E N T A N E W D IR EC TIO N ? 12.1 C onsensus on Cost 12.2 M ackay's Last Stand 12.3 C riticism 12.4 Im plem entation o f the W hite P aper P rop osals 12.5 T he L abour Party - A N o v Legal A id Policy? C HAPTER 13 CIVIL LEGAL AID AND LE G A L EX PEN SES INSU RA N CE: CONCLUDING C O M M EN TS 13.1 Legal Aid - L essons from the Past: S olu tion s for T o d a y 13.2 Legal E xpenses In surance - E xistin g P rob lem s 13.3 P ossible Solution s 13.4 P artnership - T he W ay A head A PPEN D IX A APPENDIX B BIBLIOGR A PHY - BOO KS BIBLIOGRAPHY - ARTICLES BIBLIOGRAPHY - REPOR TS ...UMI Number: U117376 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent... Also, if material had to be removed, a note will indicate the deletion Dissertation Publishing UMI U117376 Published by ProQuest LLC 2013 Copyright in the Dissertation held by the Author Microform